Institutionalism "Old" and "New."(40th Anniversary Issue)

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As I look back on the past forty years of organization studies, I experience an exhilaration tinged with regret. We have learned a great deal; we are awash in insights; we have had significant influence on the art of management. Yet we have failed to address - in the sustained and systematic ways they merit - some of the central problems of organization and governance. Can it be that we have been too much distracted by the quest for new paradigms?

In a little-known chapter of Logic: The Theory of Inquiry, John Dewey (1938) argued that social science should be guided by problems of life and practice rather than by intellectually self-generated conceptions and techniques. To be truly scientific, he wrote, the problems of social inquiry must "grow out of actual social tensions, needs, 'troubles' ":

The connection of social inquiry . . . with practice is intrinsic, not external. Any problem of scientific inquiry that does not grow out of actual (or "practical") social conditions is factitious; it is arbitrarily set by the inquirer instead of being objectively produced and controlled. (Dewey, 1938: 499)

Dewey did not have a narrow conception of practice. He would have been quick to say that "social" or "human" problems cannot be identified with the special perspectives and taken-for-granted thoughtways of management. A larger vision must remain attentive, however, to the values at stake in social experience, including organizational, economic, and political life; and our conceptual schemes must be disciplined by the requirements of diagnosis, problem solving, and reconstruction. Have we met that standard? In this brief essay I won't presume to offer a definitive answer. Rather, I address the question by restating the perspectives of institutional theory, including the "new institutionalism," and by considering the relevance of our common enterprise for larger issues of social policy. A proper understanding of the former will, I believe, improve the latter.

My Leadership in Administration (1957)is often cited as a source of the "old" institutionalism in organization theory. In that book I was trying to make sense of two earlier works, TVA and the Grass Roots (1949) and The Organizational Weapon (1952). Those studies focused on two key ideas: character and competence. The character of the Tennessee Valley Authority was formed as, over time and in the course of responding to external threats, the agency adopted strategies that decisively affected its capacity to uphold standards of environmental protection and, in the early years, its willingness to reach out to poor blacks and farm tenants. The Organizational Weapon tried to show how Leninist organizational methods created a distinctive competence to turn members of a voluntary association into disciplined and deployable agents.

Reflecting on these findings, in Leadership in Administration, I postulated a distinction between "organization" and "institution." As an organization is "institutionalized" it tends to take on a special character and to achieve a distinctive competence or, perhaps, a trained or built-in incapacity. Monitoring the process of institutionalization - its costs as well as benefits - is a major responsibility of leadership. Thus institutional theory traces the emergence of distinctive forms, processes, strategies, outlooks, and competences as they emerge from patterns of organizational interaction and adaptation. Such patterns must be understood as responses to both internal and external environments. As I pointed out at the time, "distinctiveness" should not be taken too literally. We may be describing the formation of a certain kind of institution.

At bottom, institutionalization is a neutral idea, which can be defined as "the emergence of orderly, stable, socially integrating patterns out of unstable, loosely organized, or narrowly technical activities" (Broom and Selznick, 1955: 238). …

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